MeasureProductivity

Productivity is a term that is being used to analyze the technical aspects related to the product manufactured within a firm under a specified time period and input conditions. Productivity can closely be related to efficiency in many ways. Productivity is the rate of change of output as per the relative change in input where as the efficiency is value of output relative to the cost of input. Whenever, there is a change in price of input, the price of output changes variably and thus efficiency increases. However with the help of advanced technology a firm can be allowed to change the quantity of output without reflecting any change in allocative efficiency.

Productivity has to be increased to enhance the overall profitability of a company. To improve productivity various measures are being adopted by business firms. The most common and effective method involves the automation of business firm which ultimately minimizes the tasks to its minimum and also cuts the labor cost to much extent. A fully automated firm can drastically improve the business productivity of a company. Much advancement in the field of productivity has been taken to measure productivity and to enhance the output accordingly. Few researches claim that raising the temperature of a workplace can profusely increase the efficiency of employee. Few experiments have also proved that well decorated work place with air conditioned environment drastically increases the stamina of employee. Increase in productivity not only counts for the benefit of that business organization, rather it also helps in achieving personal productivity of employees. Productivity has a direct effect on society as it influences the standard of living by providing a decent salary to the people. Productivity counts for the economic growth of a nation.

Labor working in an industry has a direct impact on productivity and sales. Output of a worker within a specified time limit is directly linked with the productivity. There are few aspects behind labor productivity that control productivity in true sense. Skill and creativity of labor involved in production is the key factor that determines labor productivity. Intensity, with which they work on for hours to produce the respective goods; and the relative efficiency of each labor, has always to be kept in mind to achieve maximum productivity.

The other aspect behind productivity is the perfect equilibrium that has to be maintained between quantitative and qualitative dimensions of product. Depending on the market conditions the demand and supply of goods always varies hence a perfect choice of output will always have to be maintained. A famous economist, Karl Marx gave a theory towards productivity which stated that a small physical output by a labor might create a large value while a large physical output might create a small value. He also suggested few theories to explain the concept behind rate of exploitation of man power to increase the productive forces to a great extent. Hence, owing to the above thesis it was proved that productivity of a firm is largely dependent on its labor and employees.

HR productivity has to be measured to ensure the effective performance of the HR department as a whole. Here are some tips on how to measure this aspect.

The HR department may be one of the silent departments that operate in the background of a business or organization. However, this does not mean that the HR department does not play a crucial role in achieving success for the business. This is because the HR department primarily focuses on hiring the very people that will shape and mold the business towards success. Thus, it comes as a must to measure the productivity of the department itself. And there are actually top 10 tips to measure productivity that can greatly assist you here.

However, before we do discuss these relevant tips, it would be better to understand first the very reason why HR productivity has to be measured. There are so many reasons underlying this facet in any business or organization.

What first comes to mind when you hear the phrase HR department? For the most part, people would probably think about the HR department being responsible for recruitment and selection for any given company. This is indeed one major responsibility of the HR department; however, it is most certainly not the only responsibility that the department has on its shoulders. Aside from recruitment, the HR department also focuses on payroll, compensation, benefits, employee relations, and other legal matters. These are very important aspects HR personnel deal with every single day for all the employees in the company.

These and more are just some of the reasons why it is very important to measure HR productivity. Here are some tips that can come in handy for this endeavor.

#1. Focus on percentage improvement in terms of productivity. This pertains to the money spent on people costs for every generated revenue in terms of dollar. Compare the improvement, if there is any, between the present year and the previous year.

#2. Focus on quality of recruiting. For this, you should check the performance appraisal of scores of the new hires. Just check for the average here. If a lot of new hires have been promoted to higher positions, then recruiting is of much quality here.

#3. Focus on retention. Is the turnover rate high or low? How is the performance turnover when it comes to key positions in the company?

#4. Focus on compensation and benefits. Check for the percentage outlining the employees’ pay that is quite risky, especially when based on job performance.

#5. Focus on employee relations. Determine the turnover percentage of the managers that are rated at the bottom of the pile. How are employee relations between these bottom-rated managers and the employees they handle?

#6. Focus on training and development impact ratio. Determine the difference between the employees who take jobs offered due to development opportunities and the employees who leave the company because of a lack of said opportunities.

#7. Focus on the give away or take away ratio with your competition.

#8. Focus on the impact of HR on the business results of the managers. A survey is conducted here where the overhead functions of all managers are ranked according to importance. This helps managers focus on business performance goals.

#9. Focus on HR expenses per employee. If expenses are at an all-time high without significant results, then HR productivity becomes questionable.

#10. Focus on employment brand strength. Another survey is conducted to check if the applicants do view the management practices of the company as positive.